What is the Difference Between a Fault and No-Fault State for Car Crash Claims?

insurance-policy-red-white-carsYou may have heard Georgia referred to as a fault state for car accident claims, but you may be unsure of what that means, particularly if you have heard of no-fault states.

There are important differences between these two types of insurance coverage. An experienced Macon car accident lawyer can describe the system in effect in Georgia and how it impacts your claim.

What Happens in Fault States?

In a fault state, the driver who caused the accident is responsible for the damages caused. You file a claim against the at-fault party through his or her insurance company. The insurance company reviews the claim. If the insurer approves the claim, it should pay for your damages, up to the limits of the insurance policy.

If you do not agree on the amount of compensation the insurance company offers, you can make a counteroffer. If you and the insurance company cannot reach an agreement, you can sue the at-fault driver for the damages you have sustained, including:

  • Property damage
  • Medical expenses
  • Lost wages
  • Pain and suffering

Most states, including Georgia, use a fault-based insurance system. Each insurance company is responsible for the damages that were sustained based on the degree of fault of their insured.

How No-Fault States Are Different

No-fault insurance systems have been adopted by several states. These states believe that personal injury litigation is less frequent because of the no-fault system and this helps lower insurance costs.

Generally, drivers who are involved in a car accident cannot sue the party who caused the accident. Instead, each driver files an insurance claim with their own insurance company. Insurance covers the damages, regardless of who is at fault for the accident.

In no-fault states, drivers are usually required to carry personal injury protection (PIP). This type of insurance may cover various types of damages. Depending on state requirements, this type of insurance may cover:

  • Medical expenses
  • Lost wages
  • Funeral costs
  • Out-of-pocket costs incurred because of the accident

No-fault insurance typically refers to injuries and medical expenses. If your vehicle was damaged in the accident, the at-fault driver’s liability policy may be responsible for covering this element of damages.

Generally, you cannot sue the at-fault driver for medical expenses and other damages unless your case fits certain exceptions.

In some at-fault states, you can choose whether you use the at-fault or no-fault insurance system when you obtain insurance.

In at-fault states, you may have the option of purchasing PIP insurance. Then, if you get involved in an accident, you can file a claim with your PIP insurance, even if the other driver is at fault for the accident. This additional coverage may help you receive payments more promptly, and you may prefer working with your own insurance company instead of the insurance company of an adversary.

Filing Lawsuits in Fault and No-Fault States

In fault-based states, you file a lawsuit through the traditional tort system. In a no-fault state, you may first be required to exhaust all your own insurance and show that you are eligible to file a lawsuit against the at-fault party before you can file. For example, most states say you must have suffered severe injuries or have damages that exceed a certain threshold.

An experienced lawyer from Roden Law can explain the system that applies in Georgia in a free consultation. We charge no lawyer fees unless we win compensation for your claim.